The United States stands guard over not only the global public order, but the financial order as well. If somewhere someone behaves inappropriately, then there should be forces that bring justice into this world. Thus, the US central bank played a role of a superhero, exposing the rate manipulations scheme. The villains in this story are traders of Deutsche Bank who had been steering the ISDAfix rate for five years, aiming to increase their profits in the deals on interest-rate swaps.
The US Commodity Futures Trading Commission unveiled this cunning scheme. Reportedly, the bank’s staff knew that they breached the law. This fact is proved by the correspondence between traders and a broker. It said that “a lot of people would actually do jail time if the government ever caught on”, according to the CFTC report. “There is no room in our markets for manipulation,” James McDonald from CFTC said. “We will continue to work hard to stamp it out, wherever we find it.”
Such actions of Deutsche Bank’s employees turned to be rather costly. The bank is obliged to pay a fine of USD 70 million. Earlier, CFTC has condemned Citigroup Inc., Barclays Plc, Goldman Sachs Group Inc. and Royal Bank of Scotland Group Plc. for manipulating the ISDAfix rate. These banks were fined more than USD 600 million for manipulations.
